Health Policy Center, medical groups study Medicaid expansion
by Ted Carter
Published: July 15,2012
No one is entirely sure of the fiscal implications of either rejecting or accepting the federal government’s offer to help the state expand its Medicaid rolls to include about 250,000 uninsured adults, effectively cutting in half the number of uninsured Mississippians.
The fiscal picture could come closer into focus in coming weeks as the Center for Mississippi Health Policy and the various medical-care provider organizations in the state complete their own economic examinations.
The independent, non-profit Center for Mississippi Health Policy expects to initiate an economic analysis in the next few days and hopes to have it complete by early September.
The study is part of the non-partisan Center’s mission to provide objective information to inform health policy decisions, executive director Therese Hanna said.
“We’re in the process of commissioning a study to look at the cost, the revenue and the impact of expanding versus not expanding,” Hanna said in an interview following the late June U.S. Supreme Court ruling on the federal Affordable Care Act.
The ruling upheld the so-called individual insurance mandate but struck down a provision that would have let the government withhold Medicaid funds to states that refuse to expand Medicaid to uninsured adults with incomes within 133 percent of the federal poverty level. Now, states that opt-in will receive 100 percent funding of the Medicaid expansion for the first three years starting in 20014. By 2020, states would pick up 10 percent of the costs.
In Mississippi, an opt-in would add about 256,920 people to the program between 20014 and 2019, according to an analysis by the Kaiser Commission on Medicaid and the Uninsured. The 256.920 enrollees would represent a 54.9 percent reduction in the number of Mississippians without health insurance, the analysis reported.
An estimated $9 billion would flow to Mississippi from the federal government from 2014 through 2020. The Kaiser analysis says the state’s share for that period would rise to around $421 million from a current projection of $160 million that assumes no expansion of Medicaid. The Kaiser estimates are based, however, on a maximum new Medicaid enrollment of 350,000 Mississippians.
The Health Policy Center’s Hanna said the state currently lacks sufficient economic modeling to make an informed decision.
“We like for people to make decisions based on the numbers,” Hanna said of Gov. Phil Bryant and other state officials who must decide whether to accept the deal on Medicaid expansion.
A recent study by the Urban Institute suggests that the Affordable Care Act will actually save states money. The savings come from the expansion of what is covered by the federal government and from cutting back the cost of uninsured people who need emergency care, the Institute’s analysis says.
An analysis done for the Center for Mississippi Health Care Policy by the Georgia Health Policy Center determined that under the Medicaid expansion and other provisions of the new health care law, the percentage of uninsured Mississippians would drop from a current 20 percent to 7 percent. Enrollment in Medicaid and the Children Health Insurance Program would rise from today’s 22 percent to 32 percent.
The study projects 270,000 additional people on Medicaid rolls, with annual Medicaid expenditures of $1.6 billion annually. “Over the period from 2014 to 2019 state expenditures for the newly eligible Medicaid recipients will be about $11.4 billion, with the federal government paying 97 percent of those costs,” the study done on behalf of the Center for Mississippi Health Policy concludes.
Based on estimates that current spending on Medicaid generates nearly $2 billion in revenue, the increased Medicaid spending could carry a strong economic punch.
Medicaid today makes up 16 percent of all revenue for hospitals in the state, the Mississippi Hospital Association says. That comes from treating children, pregnant women, the disabled and Medicaid eligible elderly.
That spending contributes $917 million to hospital payrolls and provides nearly 15,000 jobs, the hospital association reports
Despite Medicaid’s current-day economic significance, the Mississippi Hospital Association is still undecided on whether to endorse making 250,000 uninsured adult Mississippians eligible for Medicaid. “We’ve got to have some continuing discussions,” said Gwen Combs, the association’s vice president for policy.
“Hospitals are businesses and certainly understand that our economy and our state budget may not be able to pay for an expansion down the road,” when the state must begin carrying 10 percent of the financial load, she said.
The Mississippi Medical Association is equally conflicted, said Dr. Steve Demetropoulos, a Pascagoula emergency room physician and current association president. It has a lot more homework to do before taking a policy position, he said. “We support everyone having insurance. We just don’t know how to get there.”
Ninety percent of the state’s medical doctors treat Medicaid patients, he noted, and physicians do not want the program’s fiscal health jeopardized.
“The program is an important program for the poor across our state. We value it. The Legislature does a very good job every year struggling just to fund it. It’s the biggest budgetary outlay for the state. And we want to preserve what we have.”
Added Demetropoulos. “If we take this money and expand the rolls, I don’t know where we’re going to find ourselves.”
Fiscal worries aside, the medical association president said the Medicaid expansion does offer a significant opportunity to make sure more of Mississippi’s uninsured can see a doctor regularly. “The people who are coming (to Medicaid) would be the working poor. They don’t have enough money to buy insurance.”
He said he has one perspective as a physician that everyone should have access to health care. But as a citizen, he asks: “Do we fund education? Roads? Or highways? Do we cut those back? I don’t envy the governor.”
The medical association will be initiating studies of its own in the days ahead in an attempt to determine “what makes sense,” Demetropoulos said. “We’ve got a board meeting in August. We’ll try to develop a consensus there.”
University of Mississippi Medical Center administrators and advisors met last Wednesday to look at how the Medicaid expansion would affect the center given the different scenarios that could play out in Mississippi, spokesman Jack Mazurak said.
Much is at stake for the Medical Center. For the first 11 months of fiscal 2012, Medicaid accounted for 33.6 percent of the center’s gross charges. Mazurak said 57.8 percent of total inpatient days were Medicaid or self-pay (non-commercially insured)
Uninsured care accounted for 13.9 percent of gross charges in the current fiscal year, he added.
The numbers for Medicaid and uninsured care represent the Jackson Medical Mall and the four hospitals on the Medical Center’s Jackson campus: University Hospital, Winfred L. Wiser Hospital, Batson Children’s Hospital; and the Wallace Conerly Hospital for Critical Care.
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